* Brexit deal chances fading, von der Leyen says
* UK sees a way through parliamentary maze for Brexit bill
* PM Johnson pushes ahead with bill to breach Brexit treaty
(Adds British minister on law break)
By Gabriela Baczynska and Guy Faulconbridge
BRUSSELS/LONDON, Sept 16 (Reuters) - The head of the
European Commission said on Wednesday the chances of reaching a
trade deal with Britain were fading by the day as the British
government pushes ahead with moves that would breach their
divorce treaty.
The British government unveiled draft legislation last week
which it acknowledges would violate its international legal
obligations and undercut parts of the divorce deal it signed
before Britain formally left the European Union in January.
Brussels wants Prime Minister Boris Johnson to scrap what is
known as the Internal Market bill, saying it could sink talks on
future trade arrangements before Britain leaves the EU's single
market, which it has remained part of during a status quo
transition period that expires at the end of this year.
Johnson has refused.
"With every day that passes, the chances of a timely
agreement do start to fade," said Ursula von der Leyen,
President of the European Commission, the EU executive.
In a speech to the European Parliament, she said the divorce
agreement "cannot be unilaterally changed, disregarded or
dis-applied".
"This is a matter of law, trust and good faith ... Trust is
the foundation of any strong partnership," she said.
The British pound, which moves in line with perceptions of
either a chaotic or orderly Brexit, held within striking
distance of a two-month low on Wednesday.
The EU fears a disorderly Brexit if the terms of the trade
relationship are not agreed, and former British prime ministers
have said breaking the law is a step too far that undermines the
country's image.
Johnson said it was essential to counter "absurd" threats
from Brussels including that London be required to put up trade
barriers between Britain and its province of Northern Ireland
and that the EU would impose a food blockade. Such steps, he
said, would threaten the unity of the United Kingdom.
"WAY THROUGH"
The Internal Market bill is being debated by British
parliament, where Johnson faces opposition by some members of
his governing Conservative Party.
Justice Secretary Robert Buckland said the government sees a
'way through' the parliamentary maze, and Johnson has been
talking to the party rebels.
Buckland said there had been talks with Bob Neill, a
Conservative lawmaker who has proposed amending the bill to
ensure that any attempt to use the clauses that breach the
Brexit divorce agreement receive prior approval from parliament.
Britain's Northern Ireland minister Brandon Lewis told
parliament he stood by remarks he made last week that the bill
would "break international law in a very specific and limited
way".
He said he was optimistic about an eventual trade deal with
the EU, however.
EU diplomatic sources told Reuters that if the bill was
passed in its current form, Brussels felt it could not deal with
London.
(Additional reporting by Kate Holton and William James, Editing
by Timothy Heritage and Kevin Liffey)